tax free savings2

the_i_dont_kno_woman

hi all

ive got 9k savings currently split at 6k in a members bond and 3k in a cash isa

dont know what 2do nxt as am currently earning minimal interest

can anyone advise

would be prepared to invest the 6k for 1to2 yrs if tax free but would like to have access to the 3k in case of emergiencies

does any1 kno what the best options are now

for a cash isa
fixed rate bond?
is it better to put into a regular saver?
not sure what the better option if you choose an account that pays the interest monthly or anually?
also best rate for transfers ie to move the 6k direct to a tax free acoount do you make the interest on the whole amount or just on the tax free allowance for this year

help cheers

KingL

If you can access the money in the bond and want to put it into tax free savings and as long as you haven't yet paid any money into a cash ISA since 6 April 09, you can pay upto £3600 into a (tax-free) cash ISA account. You can't put any more than this into tax-free savings until next April.

If you are happy to get into tax-free investing (stocks and shares), you could put upto another £3600 into a Stocks and Shares ISA. But be warned that you can lose money on that if the value of the stocks fall.

You can choose what type of cash ISA you want (e.g. fixed term/rate - guaranteed unchanging interest rates, but usually no access possible, vs Variable Rate - usually easy access, but interest rates can drop). You can transfer your old ISA to another one that pays better interest as well as paying this year's allowance into it. Have a look here for the current best cash ISAs

Have look here for taxed savings accounts and regular savers. Obviously you will have to subtract whatever tax % you pay to understand the rates you will get on taxed savings.

It doesn't make a lot of difference whether interest is paid annually or monthly. Depends if you want to spend it. If it's in an ISA and the interest is paid into the ISA account (rather than out to an external account) then the interest is added to the tax-free pot as well.

Have a read of the stuff in the banking and savings orange tab at the top of this page for a general background. Also the HMRC ISA FAQ is quite useful.

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